BPCL Q1 results: Net profit falls 29% QoQ

State-run oil marketing company (OMC) reported its June quarter earnings on Friday (July 19). The company's standalone net profit for the reporting quarter stood at Rs 3,015 crore versus Rs 4,224 crore in the previous March quarter, a sharp 29 per cent decline sequentially. Zee Business research desk estimated the company’s standalone profit to decline 14.8 per cent sequentially to Rs 3,600 crore as the company’s gross refining margins (GRMs) and marketing margins are likely to take a hit quarter-on-quarter (QoQ). The company's net profit in the year-ago period was at Rs 10,551 crore, a steep 71 per cent decline on-year.

The sharp decline in the company's profitability during the quarter under review is attributed to weak GRMs as well as weak marketing margins.

Revenue from operations at the downstream oil company during Q1 remained flat on-year and came in at Rs 1,28,103.36 crore. The same in the previous quarter was reported at Rs 1,32,084.86 crore, a 3 per cent decline sequentially. 

The OMC's Q1 EBITDA or earnings before interest, taxes, depreciation, and amortization- a key profitability metric stood at Rs 5,650 crore versus Rs 9,213 crore in the quarter ended March of the previous FY. 

Zee Business desk estimated the company's EBITDA at Rs 6,500 crore in the reporting quarter, a 29.4 per cent decline over the previous quarter, while margin was expected to fall to 5.7 per cent, a 2.2 per cent or 220 bps reduction QoQ, suggesting the company missed estimates by a wide margin.

The market sales of the company for the quarter ended 30th June 2024 is 13.16 MMT as compared to 12.75 MMT for the quarter ended 30th June 2023. The increase is mainly in MS-Retail (6.38%); LPG (4.45%) and ATF (14.53%).

The Average Gross Refining Margin (GRM) came in at $ 7.86 per barrel (April-June 2023: $ 12.64 per barrel, this is before factoring the impact of Special Additional Excise Duty and Road & Infrastructure Cess, levied w.e.f 01st July 2022), added the company's filing.

Furthermore, during the quarter ended June 30, the company had issued and allotted 2,16,92,52,744 ordinary shares of Rs 10 each, as fully paid-up bonus shares in the proportion of 1:1.

After the results, the company's stock ended 4.5 per cent lower at Rs 303.8 per share.